Tech Isn't Everything

By Alex Eule |  Monday, August 3

Now for Some Good News. Technology companies have arguably helped save the economy -- and the stock market -- during the pandemic. It's why the tech-heavy Nasdaq Composite is up 22% this year, including today's 1.5% gain.

The less tech-centric Dow Jones Industrial Average, by comparison, is down 6.6% on the year. 

But there are signs that the economic strength goes beyond just tech. This morning, a key manufacturing index from the Institute for Supply Management showed U.S. manufacturing activity expanded for the third straight month, up 1.6% from a month ago. The expansion was slightly better than expected. (Figures above 50 indicate expansion.) Some of the good news included the best new-order performance since September 2018, along with a contraction in inventories after two months of growth.

But employment continues to shrink, "as factories were able to achieve significant gains in output with a reduced labor pool." On Barrons.com, Lisa Beilfuss explains why the latest data means the economy still needs a fiscal stimulus plan from Congress. 

Democrats and Republicans continue to negotiate that bill,  after extended unemployment benefits expired on Friday. For now, there's no clear sign of progress, with Congressional leaders and the White House expressing different views on the latest round of negotiations. 

Given today's market performance, investors seem less than worried. The major indexes all rose, with the broad-based S&P 500 up 0.7%. The Nasdaq's gain, by the way, was good enough for the index's 29th record close of the year.